Capital Asset Policy
Responsibility for policy: Chief Financial Officer
Approving authority: Vice-Chancellor
Last reviewed: February 2016
Next review date: February 2021
- This policy applies to all staff of the University of Waikato.
- This policy does not apply to Intellectual Property, as defined in the Intellectual Property Rights Policy.
- The purpose of this policy is to:
- set out the processes that apply with respect to the identification of a capital asset as such, and
- identify responsibilities and accountabilities in relation to the University's capital assets.
- This policy should be read in conjunction with the following:
- In this policy:
asset means an item of property, plant, or equipment or an item purchased or created by the University or donated to the University for use in the production of goods and services, whether tangible or intangible
capital asset means an asset that has been capitalised in accordance with this policy.
Identification of an asset as a capital asset (capitalisation)
- Any asset that meets all of the following conditions must be capitalised:
- the asset must be controlled by the University
- the Chief Financial Officer is satisfied that future economic benefits will flow to the University from the use of the asset over more than 12 months
- the asset has not been acquired or constructed for the purpose of resale, and
- unless clause 7c or 8 of this policy applies, the asset cost $2,000 or more.
- Clause 6 of this policy applies whether the asset is:
- an individual asset, or
- a collection of items or components that are very similar and that have been identified by the Chief Financial Officer as one asset for the purpose of capitalisation, whose combined original cost is $2,000 or more, or
- an accessory which cannot operate in isolation and which was acquired for permanent attachment to an existing capital asset and judged by the Chief Financial Officer to significantly increase the efficacy and efficiency of the existing capital asset, irrespective of cost.
- All servers, desktop computers, laptops, AV equipment held in the Information and Technology Services Division pool, regardless of whether components are purchased separately or as part of a standard system bundle or a custom system bundle, and all artwork acquired for the University's art collection must be capitalised, irrespective of cost.
- Where an accessory is acquired for permanent attachment to an existing capital asset, the cost and life of the existing capital asset must be adjusted accordingly to take account of the value of the accessory.
- In order to capitalise an asset, it must be:
- recorded on the University's Fixed Asset Register
- allocated a unique asset number
- insured, and
- subject to depreciation.
- A capital asset whose individual cost is $2,000 or more must be separately itemised in the Fixed Asset Register.
Funding for capital asset purchases
- Funding for the purchase of a capital asset may be derived only from:
- a capital budget approved by Council, or
- internal research funding transferred from the University of Waikato Research Trust to the University to the University specifically for the purchase of a capital asset or assets, or
- external research contract funding provided to the University specifically for the purchase of a capital asset or assets, or
- funding donated to the University specifically for the purchase of a capital asset or assets.
- A capital asset purchased through the University of Waikato Research Trust or external research funds is not eligible for replacement through the University's capital budget.
- The allocation of a capital budget does not in itself authorise the purchase of a capital asset, the purchase is also subject to the Financial Authority Policy and the Procurement Policy.
Expenditure on existing capital assets
- Expenditure that extends the useful life or expands the functionality of an existing capital asset may be deemed capital expenditure; expenditure to reinstate the original economic benefit of a capital asset (i.e. repairs or maintenance) will not be deemed capital expenditure unless approved as such by the Chief Financial Officer.
Partially or wholly internally created capital assets
- Where a capital asset has been partially or wholly created using existing University of Waikato resources, the direct cost of the creation of the capital asset must be added to the value of the capital asset.
Disposal of a capital asset
- Staff who wish to dispose of a capital asset must do so in accordance with the Financial Authority Policy and the Asset Disposal Procedure.
Responsibilities and accountabilities
- Responsibility for the capitalisation of an asset rests with the purchaser of that asset.
- Responsibilities for the management of particular categories of capital asset throughout the complete lifecycle from acquisition to disposal are set out in the Appendix to this policy.
- Responsibility for maintaining the Fixed Asset Register rests with the Chief Financial Officer.
- Staff must take reasonable care to prevent the damage, loss or theft of the University’s capital assets.
- Line managers must report any breaches of this policy to the Chief Financial Officer.
Responsibility for monitoring compliance
- The Chief Financial Officer is responsible for monitoring compliance with this policy and reporting any breaches to the Vice Chancellor.
- Breaches of this policy may result in disciplinary action under the Staff Code of Conduct.